President Barack Obama announced a plan to overhaul federal funding for higher education Thursday, challenging colleges to compete for government dollars based on the services they provide for their students.
The plan aims to tie federal funding to college performance, proposing new ratings that will assess universities on measures such as performance and the value of the education provided. Obama hopes to release the ratings by the start of the 2015-16 school year and to introduce legislation allocating federal aid based on these ratings in 2018. The president’s agenda also targets student debt, proposing a cap on federal loan payments at 10 percent of borrowers’ monthly income.
“Higher education cannot be a luxury,” Obama said in a speech at the University at Buffalo in New York Sunday morning. “It’s an economic imperative — every American family should be able to afford to get it.”
The average student who takes out loans accrues more than $26,000 in debt by the time he or she graduates, according to a White House press release.
Average tuition and fees at four-year public universities have increased by more than 250 percent in the past three decades, the release said. Meanwhile, typical family income has increased by only about 16 percent over the same time frame.
According to a statement by UC President Mark Yudof, UC students who take out loans graduate with an average debt that about $7,000 less than the national average.
“UC’s graduation rates and time to degree rank high among public universities,” Yudof said. “And we are developing additional online offerings to further expand access to high-demand courses. Yet, there is always more that can be done to ensure transparency and access, and we look forward to working with the Obama administration toward achievement of shared goals.”